Kosher chicken shortage, steep price hikes following closure of one of Canada's two suppliers

Kosher chicken shortage, steep price hikes following closure of one of Canada's two suppliers

Canadian kosher chicken consumers are facing shortages and steep price hikes following the closure of one of the country’s two suppliers, as efforts get under way to foster new providers.

The owner of Toronto-based Chai Poultry closed operations in May, and sold the company’s licence to purchase fowl to a halal processing plant. Now, with only Montreal-based Marvid Poultry left to supply kosher chicken, religious Jews are concerned the trend will continue as the High Holidays approach.

“There is certainly less supply, I think that consumers are noticing that,” said Richard Rabkin, spokesman for the Kashruth Council of Canada, the largest kosher certification agency in the country.

“Usually economic theory dictates that less supply leads to increases in prices so I think that has indeed been the case,” he said.

Chai Poultry owner Charles Weinberg said he spent five years searching for someone to buy his 25-year-old business, which stopped turning a profit about two years ago. Finally, in May, with no buyer in sight, Mr. Weinberg announced his retirement and sold his chicken quota to Milton, Ont.-based Sargent Farms.

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“I’m not proud but I had to make a decision to retire as you get older. I have family, grandchildren,” said Mr. Weinberg. “I don’t want anyone thinking this was done because I wanted to put the community in this position; that’s why I gave the community five years.”

Marvid owner Moishe Freidman told the National Post consumers wouldn’t face price hikes or supply shortages and that his factory is prepared to meet the expanded demand, raising the slaughter of about 40,000 chickens in a single shift to 200,000.

It’s not panning out that way, says the Kashruth Council, which issued a notice to consumers stating its concern regarding “the supply and selection of kosher poultry in Canada.” Mr. Rabkin said his organization is looking to work with community stakeholders to support any entrepreneurs who want to get into the kosher slaughter trade.

Kosher consumers and distributors in Ontario say they are already seeing the impact of having only one supplier but would only speak under the condition of anonymity, fearing negative repercussions within the insular Orthodox community.

One woman, a 64-year-old high school teacher in Toronto, contacted the Kashruth Council after a recent trip to Costco showed there were no kosher chickens in stock.

“I saw there wasn’t a chicken to be had in the place, I didn’t remember that situation ever occurring before,” she said.

She went to grocery chain Metro, only to discover prices had ballooned.

“I had never, ever seen a kosher chicken for $18. And that’s when I panicked.” Before, she said, she would spend between $9 and $12 for a regular sized chicken. (In general, kosher meat can cost up to 40% more than regular poultry.)

“It wasn’t huge by any stretch of the imagination, I said this is ridiculous, this must be because the competition is so slim now.”

The Chicken Board of Ontario is considering stepping in to see if it can do anything to encourage new players into the market, but the head of its national counterpart is wary of the industry’s future.

Mike Dungate, director of the Chicken Farmers of Canada, says 95% of kosher chicken buyers are in Toronto and Montreal. He speculates that slaughterhouses are closing due to a lack of demand.

“There’s a lot of processors in the country that just don’t do kosher poultry. It’s truly not that big of a market. If it got bigger the market would evolve to provide that choice,” said Mr. Dungate, adding that the turndown is not exclusive to Canadian markets. Several major American kosher slaughterhouses specializing in fowl have ended operations in recent years.

A 2012 report on the specialty food market by the ministry of agriculture showed that the North American kosher food market grew 15% year-over-year in the past decade, with roughly $200-billion in kosher certified food products sold annually to approximately 15 million customers. Most of that growth stems from the prepared foods market. Kosher fowl makes up a relatively small portion of the $6-billion Canadian poultry industry and it appears to be shrinking.

It’s difficult to pinpoint exactly what caused the contraction in the kosher chicken market: Mr. Weinberg declined to say exactly why his company became unprofitable.

One possible explanation, suggested by a halal certification agency, is that the kosher market is sagging because Muslim consumers have their own suppliers and are no longer propping it up.

“Muslims are allowed to eat kosher meat. There was a lot of demand in the past to use kosher but now they’re using halal,” said Abdulla Ali, the secretary general of Islamic Society of North America.

Mr. Weinberg doesn’t buy that argument, along with other kosher experts consulted.

“That’s ridiculous,” he said. “There are many reasons why a company stops being able to compete.”